Advanced FX & FXO

ACI Diploma 1

Advanced Foreign Exchange & FX Options

Visualization and analysis of the FX volatility surface for one The new ACI Suite of Diplomas is comprised of several modules covering core topics of the global financial markets. Diploma 1: Foreign Exchange & FX Options, Diploma 2: Fixed Income & Money Markets, Diploma 3: Asset, Liability & Risk Management, Diploma 4: Advanced Derivatives. Diplomas 5–8 will be launched consecutively in the future. In order to be awarded the ACI Diploma a candidate must pass one Diploma examination and meet the eligibility criteria.

KEY COURSE OBJECTIVES

The new ACI Suite of Diplomas builds on the ACI Dealing Certificate and the ACI Operations Certificate as well as on the ACI Model Code exam. It is designed to ensure that candidates acquire a deep theoretical and practical knowledge of financial markets with emphasis on currency, interest rate and credit derivative instruments, and the linkages that exist between those markets and risk management. It stresses the importance of best practice and market conduct in addition to technical skills. Candidates are expected to have acquired a solid grounding in the core subject areas and have the requisite skills in financial mathematics prior to matriculating for the Diploma.

Candidates confidently deal with FX spot, swap and forward transactions, currency options, using bid-offer spreads, recognize arbitrage-relationships, collateralization, structure and price simple strategies and understand the basics of standardized exotic options (in the sense of the ISDA Definitions). Candidates will conduct option valuation and interpret risk management figures. A focus will be on understanding the meaning of hedge sensitivities (Greeks) in the context of trading and risk management, the relationships among these Greeks and Greeks of higher order. Candidates will be able to structure risk management solutions for corporate treasury using vanilla and basic exotic options as their building blocks; these exotic options include mainly barrier, touch, digital options as well as variance and volatility swaps. Part of the working knowledge in FX options will include the FX volatility smile for vanilla options and apply vanilla structures to manage the risk of changing volatility and shape of the smile surface. Candidates will be able to judge which combination of products cause which type of risk for different client types.